A: Transforming Growth Factor-beta/Smad3 Signaling Regulates Insulin Gene Transcription and Pancreatic Islet beta-Cell Function. Pancreatic islet beta-cell dysfunction is a signature feature of Type 2 diabetes pathogenesis. Consequently, knowledge of signals that regulate beta-cell function is of immense clinical relevance. Transforming growth factor (TGF)-beta signaling plays a critical role in pancreatic development although the role of this pathway in the adult pancreas is obscure. Here, we define an important role of the TGF-beta pathway in regulation of insulin gene transcription and beta-cell function. We identify insulin as a TGF-beta target gene and show that the TGF-beta signaling effector Smad3 occupies the insulin gene promoter and represses insulin gene transcription. In contrast, Smad3 small interfering RNAs relieve insulin transcriptional repression and enhance insulin levels. Transduction of adenoviral Smad3 into primary human and non-human primate islets suppresses insulin content, whereas, dominant-negative Smad3 enhances insulin levels. Consistent with this, Smad3-deficient mice exhibit moderate hyperinsulinemia and mild hypoglycemia. Moreover, Smad3 deficiency results in improved glucose tolerance and enhanced glucose-stimulated insulin secretion in vivo. In ex vivo perifusion assays, Smad3-deficient islets exhibit improved glucosestimulated insulin release. Interestingly, Smad3-deficient islets harbor an activated insulin-receptor signaling pathway and TGF-beta signaling regulates expression of genes involved in beta-cell function. Together, these studies emphasize TGF-beta/Smad3 signaling as an important regulator of insulin gene transcription and beta-cell function and suggest that components of the TGF-beta signaling pathway may be dysregulated in diabetes. B: Protection from Obesity and Diabetes by Blockade of TGF-beta/Smad3 Signaling. Imbalances in glucose and energy homeostasis are at the core of the worldwide epidemic of obesity and diabetes. Here, we illustrate an important role of the TGF-beta/Smad3 signaling pathway in regulating glucose and energy homeostasis. Smad3-deficient mice are protected from diet-induced obesity and diabetes. Interestingly, the metabolic protection is accompanied by Smad3-deficient white adipose tissue acquiring the bioenergetic and gene expression profile of brown fat/skeletal muscle. Smad3-deficient adipocytes demonstrate a marked increase in mitochondrial biogenesis, with a corresponding increase in basal respiration, and Smad3 acts as a repressor of PGC-1alpha expression. We observe significant correlation between TGF-beta1 levels and adiposity in rodents and humans. Further, systemic blockade of TGF-beta signaling protects mice from obesity, diabetes, and hepatic steatosis. Together, these results demonstrate that TGF-beta signaling regulates glucose tolerance and energy homeostasis and suggest that modulation of TGF-beta activity might be an effective treatment strategy for obesity and diabetes. We continue to examine the mechanistic underpinnings of the above mentioned observations as they related to the role of TGF-beta familt signaling in diabetes and obesity pathogenesis.